Insurance industry suffers profit decline amidst rise in revenue
Despite the impressive income recorded by the insurance industry in the first quarter of 2023, Q1’23, the sector has recorded decline in profit just as claims payment also declined.
Findings from the financial results of leading 15 insurance firms show that while cumulative Gross Written Premium, GWP, rose by 24.9 percent to N159 billion in Q1’23 from N127.3 billion recorded in the corresponding period of Q1’22, Profit After Tax, PAT, declined by 7.6 per cent to N13.3 billion in Q1’23 from N14.4 billion.
The industry leaders also recorded a cumulative 6.8 per cent decline in claims payment to N39.6 billion from N42.5 billion.
Insurance experts attributed the decline to harsh business environment coupled with rising inflation.
However, six companies were largely responsible for the weak industry profitability, despite their impressive revenue.
AIICO Insurance recorded a GWP increase to N31.7 billion from N24.7 billion, but the PAT declined to N1.4 billion from N4.9 billion.
Prestige Assurance GWP increased to N4.8 billion from N4.3 billion. PAT declined to N264.4 million from N599.6 million.
Linkage Assurance GWP increased to N5.5 billion from N4.6 billion. PAT declined to N46.7 million from N149.4 million.
Regency Alliance GWP increased to N1.9 billion from N1.5 billion. PAT declined to N720.3 million from N643.9 million.
Custodian and Allied GWP increased to N28.2 billion from N24.4 billion. PAT declined to N2.0 billion from N2.2 billion.
Guinea Insurance GWP incrased to N804.2 million from N400.5 million. PAT delined to N33.2 million from N63.7 million.
Nem Insurance recorded GWP of N19.9 billion from N12.7 billion. PAT increased to N2.9 billion from N1.5 billion.
Sunu Assurances GWP went up to N3.4 billion from N2.6 billion. PAT increased to N291.7 million from N87.4 million.
Cornerstone Insurance GWP increased by N8.0 billion from N6.0 billion. PAT increased to N778.5 million from N77.9 million
Lasaco Assurance GWP declined to N6.5 billion from N5.1 billion. PAT increased to N301.8 million from N297.6 million.
Sovereign Trust GWP increased to N9.1 billion from N7.4 billion. PAT increased to N492.1 million from N489.1 million.
Veritas Kapital GWP went up to N2.1 billion from N1.4 billion. PAT increased to N180.9 million from N126.2 million.
Consolidated Hallmark GWP increased to N4.9 billion from N4.0 billion. PAT increased to N510 million from N441.9 million.
Axa Mansard GWP went up to N19.4 billion from N17.3 billion. PAT increased to N1.6 billion from N463.8 million.
Mutual Benefits GWP went up to N12.8 billion from N10.9 billion. PAT increased to N1.7 billion from N1.6 billion.
Speaking on the development, former President of the Nigerian Council of Registered Insurance Brokers, NCRIB, Mr. Babajide Olatunde-Agbeja noted that the harsh operating environment, coupled with rising inflation impacted on profit of insurers.
He said: “The insurance industry is not immuned from the overall happenings in the Nigerian economy. Many of the negative happenings in the economy also affect the insurance sector. The economy has been plagued with harsh business climate, rising inflation, weak economic policies and so on. So all these impacted on profit of insurers.”